Chapter 11

• Establishment of a balanced project plan is the first major outcome of project risk management.
• Monitoring and controlling project risks throughout the project life cycle is the last step in the risk management process.
• Monitoring and controlling a project is fundamentally project risk management.
• The Monitoring and Controlling Process Group identified within the PMBOK® Guide underpins the other project management Process Groups and spans the entire project duration.
• This grouping includes the utilization of all the tools and techniques called out within the project management plan to measure progress and control project activities.
• Tools and techniques are enablers, and must be accompanied by the appropriate processes or techniques to be effective.
• Examples include tools and techniques used for project scheduling, estimating project costs and schedules, cost/schedule control, risk management, communications management, HR, product quality management, and management of outsourced activities.
• The five Project Management Process Groups are Initiating, Planning, Executing, Monitoring and Controlling, and Closing.
• There is a tremendous amount of overlap among the Project Management Process Groups, unlike the phases of the project life cycle.
• Project execution coupled with monitoring and controlling, and replanning begins with the original project plan.
• A vital part of the overall project management process is the underlying Monitoring and Controlling Process Group, which typically leads to replanning as the team performs.
• Project risks tend to continually change over the course of the project due to timing of risk events.
• The impetus for project change is usually to address new unacceptable risks, sometimes self-inflicted by team performance, and at other times due to circumstances that are not under the control of the team.
• Actual team performance results do not meet project plan objectives, this typically necessitates corrective actions to course-correct.
• Regardless of the amount of planning, there is a chance of planning shortfalls.
• The team is expected to determine the scope to meet all of the requirements, and when planning shortfalls are discovered, the appropriate trade-offs must be evaluated to remedy the situation.
• Unknown risks are, by definition, unable to be effectively and proactively addressed, other than to establish some management reserve.
• Scarce resources are not always available when needed, and when resource availability becomes a real issue, project replanning actions are necessary relative to the affected project(s).
• Good early warning signs can be a huge benefit to project managers and project teams.
• Evaluate the repercussions of requirements changes no matter how insignificant they might appear on the surface.
• A project plan represents a balanced combination of six project constraints: project scope, project cost, project schedule, project resources, product quality/technical performance, and project risk.
• A change to any one of these constraints will impact at least one other in a similar way.
• There is a direct relationship between project cost and schedule.
• The addition of project scope typically takes additional resources to perform and that usually adds costs.
• Product quality is typically defined by the various technical requirements imposed on the product.
• Changes to resource capability can affect other project constraints.
• When a project cannot be fully balanced in the conflict examples described, additional project risk must be accepted.
• Project changes and the resultant conflicts between project constraints can very easily lead to additional project risks.
• Employing the necessary project management tools and techniques to monitor and control risks, and reassessing project risks on a continuous basis throughout the project life cycle, can make a huge difference in project performance, overall.
• The risk reassessment process is an integral part of the overall project management process, highlighting the key project risk management process interactions.
• The outcome of the reassessment process should be the establishment of a rebalanced plan, communicated and performed appropriately.
• If the project team does not overtly address project risks during the above process, additional project risk can surface and will likely go unchecked-potentially leading to an unbalanced revised project plan and unexpected future issues.
• Project management tools and techniques play a role in monitoring and controlling project risks.

Risk Indicators from Project Management Tools and Techniques

• Several of the project management tools and techniques produce useful metrics that help monitor and control the project's performance over time.
• Tracked requirements changes, actual performance compared against the cost and schedule baselines, probabilistic histogram results, and Six Sigma quality indicators.
• Key performance indicators for overall project cost and schedule are CPI and SPI.
• An indicator value of less than 1.0 denotes either a projected cost overrun or schedule slip.

Project Risk Review Board

• A risk review board that meets periodically (e.g., weekly, biweekly, or monthly) can help keep the project under control.
• The agenda should review both open risks and opportunities, and new concerns that might warrant evaluation.
• If risk events have occurred since the last meeting, their results should be reviewed and appropriately acted upon.
• Questions to consider: Have there been any changes to key project or product requirements? Have there been any project priority changes? Are all the project assumptions still valid? Has the team identified any additional unplanned project scope to perform?

Periodic Stakeholder Reviews

• Stakeholder reviews are opportunities to discuss issues, concerns, and changes made/planned, as well as to obtain the appropriate buy-in and/or approval.
• Project Traffic-Light Status Charts: Organizations that conduct a multitude of projects at any given time will usually establish standard reporting guidelines and templates for project status/update purposes.

Escalation Processes

• Some project management responsibilities such as escalating issues typically fall into this category.
• Escalation is necessary due to irreconcilable conflicts that arise between project teams and functional groups.
• Good practice is to first work with the person in conflict with your decision, only escalate after ensuring they have been given time to reconcile.

Project Planning Tips to Reduce Project Risk

• Bound all soft or open-ended project and product requirements, and plan for the worst-case scenario.
• Consider prioritizing project and product requirements into at least three categories: must-have, desired, and nice-to-have.
• Construct the project WBS to enable evaluation of functional performance.
• Plan as much time and budget as you can justify for the later project tasks/activities.
• Plan on a slow project resource ramp-up, and plan to urgently manage the various performing groups for resources from day one.
• Look for and avoid multiple critical paths.
• Negotiate vehemently for project reserves.
• Ensure that the specifics of what constitutes complete for critical interrelated task dependencies is clearly defined up front.
• Ensure you are working to the right product development process.
• Ensure you are using the appropriate project management tools and techniques for the type of project you are leading.
• Pursue project team colocation, if possible.

Project Execution Tips to Reduce Project Risk

• Start your project with a sense of urgency.
• Be very stingy in relinquishing project schedule buffer.
• You cannot micromanage your key suppliers or subcontractors too much.
• Always reassess project risks whenever there is a negative impact on a project constraint.